FRENCH EXCHANGE 1. Paris market.—In France, the financial center is Paris and all exchange is quoted in Paris. As a. trading center Paris is not so important in compari son with other French towns as London is compared with English cities. But as an investment center Paris far outstrips the other cities, and this gives it its importance in the financial world.
2. Latin Union..—In many respects the French monetary system resembles that of the United States. The standard has come to be gold, but in circulation there is a large amount of silver (five-franc pieces) which is accepted, under the law, as unlimited legal tender. France is the chief member of the Latin Monetary Union formed in 1865 in conjunction with Belgium, Italy and Switzerland. Greece became a part of it two years later. Tho known in the respec tive countries by different names the coins of all mem bers of the Union are identical in weight and fineness and have legal currency tliruout the Union. Other states, Spain, Bulgaria, Roumania, Serbia and Fin land have the same units but are not associated with the Latin Union thru any monetary treaties.
The original treaty of the Latin Union contem plated a bimetallic system of currency, but soon after the Union was founded the free coinage of silver was suspended, but not before a large quantity of full le gal tender five-franc pieces had been coined and put into circulation. The continued coinage of gold, how ever, has reduced this silver money to a subordinate position.
3. Monetary system.—The unit of the French monetary system is the franc of .32258 grammes 900 fine, equivalent to .290322 grammes of pure gold. In the gold coinage it is represented by its multiples 5, 10, 20, 50, and 100 francs, tho coins above 20 francs are rarely seen. The or twenty-franc piece may be regarded as the standard gold coin.
A kilo of mint gold 900 fine is coined into 155 Na poleons or 20 franc pieces or 3100 francs. it follows that the value of 1 kilo of fine gold = x 3100 or fcs.3444.444, and a franc contains .290322 grammes of fine gold. France has only one mint, situated in Paris, which pays at the rate of fcs. 3437 for one
kilo of fine gold for coinage, arrived at as follows: Value of 1 kilo of mint gold 900 fine .. fcs. 3100.
Less mint charges per kilo 6.70 fcs 3093.30 The value of one kilo of fine gold = 3093;0:10 = 3437.
The Bank of France will purchase British gold coin at the rate of 3149.6668 fcs. per kilo; and Aus trian, German, Russian and American coin at fes. 3090.5504 per kilo.
The silver five-franc piece weighs 25 grammes 900 fine and contains 22.5 grammes of pure silver. In addition to the five-franc piece there are silver coins of two and one franc, and of 50 and 20 centimes or one-half and one-fifth franc. These smaller coins are exact subdivisions by weight of the five-franc piece but as the fineness of these coins is only 835, there is less pure silver in five one-franc pieces than in the five-franc piece. Smaller coins than five francs are limited in amount to 7 francs per head of the popu lation. Unlike the five-franc pieces, they have not unlimited legal tender.
Paper money is issued only by the Bank of France in notes of 50, 100, 500 and 1,000 francs.
4. Stamp duties and is a tax of ten centimes on checks payable in the town in which they are drawn and of twenty centimes if payable elsewhere. Bills of exchange are taxed five centimes per fcs. 100 or fraction. For quotation purposes stamp duties are reckoned as 26 centimes or of 1 per cent on $100 or Fcs. 520.
The law requires a check to be paid within eight days from the date of issue; otherwise it is consid ered as a bill of exchange. As figures can be easily changed the law requires the date to be written in words.
Quotations for time bills drawn on France are ar rived at by adding the interest and stamps to the de mand rate. The interest is calculated on a basis of Fes. 520 equals $100. There are no days of grace, and interest is computed on the basis of 360 days to the year. The following rules will be helpful in de termining the rate of interest which is applicable: Documentary payment bills can be discounted with banks at the Bank of France rate.